Grendene looks to grow in Arab markets

21 de setembro de 2017

São Paulo – The Brazilian footwear manufacturing company Grendene, one of the biggest players in the global shoe industry, is working to maintain and increase the level of its sales in Arab countries, amid slumping consumption due to the drop in oil prices and regional political stability. The information was conveyed to ANBA in an interview by email.

“Grendene believes recovery will be gradual, because countries have made some changes in their economic policies, and therefore that its retail sales will increase in those countries, especially Saudi Arabia,” the company said. Grendene is a member of the Arab Brazilian Chamber of Commerce.

Grendene has a strong foothold in the Arab market. It ships product to Saudi Arabia, Algeria, Bahrain, Qatar, Egypt, the United Arab Emirates, Iraq, Jordan, Kuwait, Lebanon, Lybia, Morocco, Mauritania, Oman, Sudan and Tunisia. Many of its brands, like Melissa, Ipanema and Rider are popular with Arab buyers.

The company does not provide a breakdown of its sales in each country, but its total export volume climbed by 9.2% year-on-year in H1, to 20 million pairs of shoes exported, while revenue dropped by 6.3% to BRL 272 million (USD 87 million). Brazilian currency hiked during the period while export prices were kept the same, hence the drop in revenue in domestic currency, a Grendene report said.

Grendene owns over 20 stores in Arab countries, and says it plans to open new ones over the next few years. Although its stores in Morocco and the UAE are run by Grendene distributors, ones from the Gulf have express an interest in getting concessions to open Grendene-brand outlets and kiosks, it told ANBA.

Melissa, Ipanema and Rider are the company’s best-known brands in Arab countries, but Grendene said Grendha gaining space in the women’s shoe market, and the company is seeking to increase market share for new brands like Zaxy and Cartago. Its broad brand portfolio also includes Pega Forte, Grendene Kids and Zizou, as well as third-party brands and licenses for names such as Mormaii, Guga Kuerten, Galinha Pintadinha and Bad Boy.

Grendene says it makes frequent visits to Arab countries to share information with its distributors, and that it’s working on fast actions to boost efficiency and sales in each of the markets. “Retail is changing rapidly and it requires constant adaptation,” the company told ANBA. It goes to the major European industry shows, where it gets approached by Arab clients.

One of Grendene’s goals right now is improvement of points of sale. When questioned about any plans of advertising campaigns in the region, it said although no such actions are on its schedule, it’s looking into holding an event in Saudi Arabia towards the end of this year.

Grendene sells to over 100 countries. It domestic and worldwide sales in H1 this year amounted to 71.2 million pairs of shoes. The amount is 4% higher than in H1 2016, according to the company’s reports. It saw BRL 1.15 billion in gross revenue, up 8.5%, BRL 445 million in gross income, and BRL 263.7 million in net income in H1 2017. Grendene is listed on BM&FBovespa’s Novo Mercado exchange.

The company has 11 manufacturing units across the states of Ceará, Rio Grande do Sul and Bahia, one PVC unit, a distribution center in Sobral, Ceará and a showroom in Milan, Italy. It also has five concept stores: Melissa Gallery and Ipanema store, in São Paulo; one in Milan; one in New York; and Ipanema House in Rio de Janeiro. The company’s headquarters are in Sobral.

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*Translated by Gabriel Pomerancblum